At CamboFlare, an Asian fusion restaurant in Big Lake, Minnesota, customers can pay with cash, credit card, major cryptocurrencies and soon CamboCoin — a cryptocurrency created specifically for the restaurant.
Since the restaurant opened in November 2020, it has accepted payments by bitcoin, bitcoin cash, Ethereum, and Dogecoin. Now it is one of the only restaurants in Minnesota, according to owner Mike Nget, taking this step.
But at CamboFlare, so few people actually pay in crypto that the restaurant gives 10 to 50 percent discounts to those who do. Even in a small city like Big Lake, with 10,000 people, Nget said a few people are catching on to crypto, realizing they could safely pay for fried rice with a tiny bitcoin payment.
“There aren’t very many restaurants that accepted bitcoin to begin with, and I figured, let’s break barriers,” Nget said. “Let’s be one of the first in Minnesota to start doing that and pave the way to kind of shine a light on cryptocurrency”
Across the country, some restaurants have recently adopted cryptocurrency as a payment method, alongside cash and credit cards. Others are taking the crypto craze a step further.
Flyfish Club, which is set to open early next year in New York City, is the first private dining club where members join by purchasing a nonfungible token (NFT), essentially a certificate of authenticity using a unique string of characters connected to a blockchain. Memberships sell for 2.5 Ethereum — about $7,557 today — for the Flyfish token, while the Omakase token (which gives members access to the club’s 14-seat omakase room, which features tasting menus designed by a master sushi chef) sells for 4.25 Ethereum — or $12,847 today.
“Between being a new innovation and converting a membership into an asset and all this excitement around crypto in the world, on top of trying to find new ways to monetize, on top of an industry that generally needed some form of innovation, that just created this ball of fire that got us very excited,” said David Rodolitz, founder and CEO of Flyfish Club.
Though few U.S. chain restaurants accept cryptocurrency as a direct form of payment, some welcome cryptocurrencies used as payment on restaurant apps. Starbucks customers can use digital assets like bitcoin as payment via Bakkt integration in the Starbucks app, Nicholas Sampogna, a spokesman for Starbucks, wrote in an email.
Future gains
But crypto is precarious enough that the independent restaurants accepting it often put price caps on purchases due to market volatility and focus more on it potential benefits in the future.
Ocean Blue, a restaurant and oyster bar in Utica, New York, which is fully cashless, only receives a few crypto transactions a month. Owner Francis Pezzolanella said that accepting crypto has enabled the restaurant to reprioritize its time.
“It’s not as simple as me taking your cash. It’s not as simple as me taking your credit card,” Pezzolanella said. “But what it has done is, it’s allowed our staff to spend more time taking care of our customers.”
At Golden Steer Steakhouse in Las Vegas, few customers have purchased a meal in crypto since they started accepting it in December 2021, said managing partner Nick McMillan. He attributed this to “the bloodbath that the crypto market” saw in early 2022, as well as decreased tourism in Las Vegas because of the omicron variant. Yet he said it reminds him of the optimism surrounding the advent of the internet.
“I think that we like that way of thinking,” he said. “Not everything’s going to work, but we want to try and think creatively as much as we can.”
Growing hesitation
Restaurant owners also find that it can be expensive to pay in crypto. Because restaurants accept very small payments of just a few dollars per order, sometimes transaction fees called gas fees can cost more than the price of a meal when paying in Ethereum, according to Scott Kominers, an associate professor of business administration at Harvard Business School. These fees compensate crypto miners for energy required to verify transactions, similar to Uber surge pricing. He said that typical crypto wallets, where crypto is securely stored, lack the “security, safety, and accessibility” many are accustomed to at banks.
“A restaurant might find that the vast majority of its customers aren’t even marginally set up to do crypto transactions, and so there may not be as much value to adding that as a payment mode,” he said.
But Kominers said that with time these transactions won’t be as costly or cumbersome. While he sees stable coin, which are cryptocurrencies pegged to an external asset like the U.S. dollar, as becoming a “huge complement” to other payment methods, high volatility dissuades mainstream crypto transactions.
“There’s a lot of risk to taking payments in an extremely volatile asset because those payments might end up being worth much less tomorrow or on the day you need to pay your staff,” said Kominers. “Unless you start doing your remittances of crypto as well, that means you might find yourself paying out at more or less than you expected.”
Potential partnerships
To encourage diners to pay with bitcoin, the payment service provider BitPay partnered with dozens of larger restaurant chains including Ruth’s Chris Steakhouse and Red Lobster and smaller spots like Formento’s and The Bristol in Chicago.
Merrick Theobald, vice president for marketing at BitPay, said that more restaurants have adopted crypto payments because they are typically fast with next business day settlement and cost little in fees, opening up more potential sales for businesses. People who pay with crypto also are more favorable with tipping, he said.
But high turnover and constantly training employees to take crypto payments may dissuade some restaurants, said Theobold. That’s because employees often lack understanding of how crypto works. Additionally, because BitPay is not integrated into point of sale systems, which allow businesses to accept payments and keep track of sales, some restaurants find crypto payment systems too confusing. The restaurant owners willing to take these risks tend to be younger owners who see crypto as part of the physical world, not just online.
“They’re not expecting 50 percent of their sales to be in crypto,” said Theobald. “But if they could get 1 percent, 3 percent, 5 percent, or even one large event throughout the year, it’s worth it.”
Going further
Some restaurants have embraced crypto beyond just payment to spread awareness about its abilities. Ricardo Varona opened Crypto Street Restaurant in Clearwater Beach, Florida, decorated with crypto-inspired art and serving Latin-inspired dishes like the Crypto Cuban and Shiba Shrimp Cocktail. Since the restaurant opened, a few dozen people have paid in crypto, including some in Dogecoin. Varona, though, has helped people sign up for platforms like Coinbase or find courses to become more involved in the crypto world.
“Especially for people that are invested in crypto, what we’re doing is to help promote crypto and helping the people that don’t know much,” Varona said. “We can talk to people at a level that is more simple, more basic.”
Varona stated that in a perfect world, the restaurant would operate solely on crypto payments. The restaurant will soon get an ATM where diners can buy crypto with cash.
For Priscilla Sotelo Klisch, who owns French bistro Le Petit Jardin in Los Angeles, taking crypto has a deeper meaning. The restaurant started taking crypto payments in 2014, perhaps one of the first restaurants in California to do so, because her mother was passionate about the technology. The restaurant stopped taking crypto payments for a few years while her mother was sick, and after she passed away, Sotelo Klisch reinstated crypto payments.
The restaurant still accepts crypto as an “experiment” because of its volatility and glitches with transactions, and it has instituted price caps on larger bills paid with crypto. While she remains conservative in her approach to minimize potential risks, Sotelo Klisch believes that more restaurants will adopt crypto once they understand its security and utility.
“I think once hopefully when the economy starts to get a little bit better, it might be something that small businesses then start to become again more open to creative, risky ideas,” Sotelo Klisch said.
Source: | This article originally belongs to Nbcnews.com
